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SUP 1.1 Application and purpose


SUP 1.1.1G

This chapter applies to every firm, except that its relevance for an ICVC is limited as the FSA does not intend to carry out an assessment of an ICVC that is specific to that ICVC.


SUP 1.1.2G

The Act requires the FSA to "maintain arrangements designed to enable it to determine whether persons on whom requirements are imposed by or under this Act, or by any directly applicable Community regulation or decision4 made under MiFID,1 or the UCITS Directive or the auction regulation,4 are complying with them" (paragraph 6(1) of Schedule 1 to the Act).

SUP 1.1.3G

The design of these arrangements is shaped by the regulatory objectives. These are set out in section 2 of the Act (The Authority's general duties) and are:

  1. (1)

    maintaining confidence in the UK financial system;2

  2. (1A)

    2contributing to the protection and enhancement of the stability of the UK financial system;

  3. (2)


  4. (3)

    securing the appropriate degree of protection for consumers; and

  5. (4)

    reducing the extent to which it is possible for a business carried on by a regulated person, or in contravention of the general prohibition, to be used for a purpose connected with financial crime.

SUP 1.1.4G

In designing its approach to supervision, the FSA has regard to the principles of good regulation set out in section 2(3) of the Act. In particular, the FSA's regulatory approach aims to focus and reinforce the responsibility of the management of each firm (section 2(3)(b) of the Act) to ensure that it takes reasonable care to organise and control the affairs of the firm responsibly and effectively and develops and maintains adequate risk management systems. It is the responsibility of management to ensure that the firm acts in compliance with its regulatory requirements. The FSA will have regard to the principle that a burden or restriction which is imposed on a firm should be proportionate to the benefits, considered in general terms, which are expected to result from the imposition of that burden or restriction (section 2(3)(c) of the Act).